Governance for Non-Profits

Transcription

1 2 Governance for Non-Profits March 24, 2010 Attorney Advertising Prior results do not guarantee a similar outcome Models used are not clients but may be representative of clients 321 N. Clark Street, Suite 2800, Chicago, IL

2 Housekeeping Call for technology assistance Dial *0 (star/zero) for audio assistance Questions can be entered via the Q&A tab located on your menu bar at the top of your screen. We will address questions at the end of the program. We encourage you to maximize the PowerPoint to full screen usage: Hit F5 on your keyboard; or Select View from the toolbar menu and click Full Screen To print a copy of this presentation: Click on the printer icon in the lower right-hand corner Convert the presentation to PDF and print as usual Foley will apply for CLE credit after the Web conference. If you did not supply your CLE information upon registration, please it to jbartz@foley.com Today s Presenters J. Mark Waxman Partner Foley & Lardner LLP Michael W. Grebe President & CEO The Lynde and Harry Bradley Foundation Dr. Carol A. Cartwright President Bowling Green State University Howard Stevenson Chairman National Public Radio

3 Introduction How are the challenges of service on a nonprofit board different than the for-profit board? The role of a Board member Board member selection Whose interests are to be served The Key Challenge Areas Strategic planning and strategic plan implementations Financial management and oversight Development (fundraising and endowment management) Board management, including succession planning and entity management Management team oversight and compensation

4 Strategic Planning and Strategic Plan Implementations The expected roles of the Board and management Developing the appropriate criteria for success Addressing the issues raised by stakeholders The need to sustain Board and management participation Identifying priorities and avoiding mission creep Key Takeaways: The Board must work to support candid discussions. The process should seek to develop and focus on a shared agenda and shared values. The plan must become the touchstone for critical decisions. Management and the Board must both embrace the strategic plan to be successful. The plan must be clear about the organization s priorities.

5 Financial Management and Oversight Identifying the critical management and financial information Pursuing transparency Assessing long vs. short term commitments and goals Addressing reserves and the endowment Key Takeaways: Financial management must be transparent. This is essential to preserve internal and external trust and perception. Non-profits must recognize that there are differences between the culture and Mission of non-profits, but still must have a margin to survive. Being worthy is not an excuse for lack of financial responsibility. Internal controls must be established and maintained.

6 Development and Fundraising Development vs. strategy Fundraising and Board membership Managing large donors Use of the endowment Key Takeaways: It is important to be clear about expectations. Transparency in terms of the relationship. between Mission and resources is necessary. In troubled times, contact with third parties (e.g. ratings agencies, AG s offices, the donor base) is mandatory. Regulatory requirements must be adhered to.

7 Board Management, Board Development and Succession Planning Establishing accountability The Board management partnership Managing Board membership Succession planning Key Takeaways: The Board and Management should develop a comfortable balance with respect to information flow, involvement and decision making. Effective strategic planning assists in Board management and priority setting. Creating group think vs. I think is the key to effective Board action. Succession planning for Board membership prevents stagnation, assists in organization perspective and creates confidence in the ability to achieve long term Mission goals. Therefore, it must be built around the strategic plan.

8 Executive and Management Compensation The right people, compensated in the right way Reviewing short and long term performance Management and Board membership CEO compensation and public transparency Key Takeaways: Non-profit compensation is a sensitive and very important topic. The message it sends internally and externally should not be underestimated. The Board must create a strong rationale for compensation decisions. The best approach to review compensation is to establish, in advance, performance goals and criteria for success, and award compensation based upon achievement of those goals. The Board must be prepared to communicate and defend its decisions based on objective and subjective factors.

9 Questions & Answers Save the date for upcoming NDI Web Conference Series programs: April 7, 2010 Sustainability in the Boardroom April 21, 2010 Trends in the Recruitment and Selection of Directors May 5, 2010 SEC Enforcement Update May 19, 2010 M&A Trends in the Boardroom Visit Foley.com/ndi to register and for more details.

10 Thank You A copy of the PowerPoint presentation and a multimedia recording will be available on our Web site within 2-3 days: We welcome your feedback. Please take a few moments before you leave the Web conference today to provide us with your feedback: